The initial public offering (IPO) of Zinka Logistics solutions continued to see muted response from the investors during the third and final day of the bidding process. However, the issue managed to sail through. The issue was off to a muted start and was booked just 24 per cent on day one, ended day two with 32 per cent subscription.
Bengaluru-based Zinka Logistics is selling its shares in the price band of Rs 259-273 apiece. Investors can apply for a minimum of 54 shares and its multiples thereafter. It is looking to raise Rs 1,114.72 crore via IPO, which includes a fresh share sale of 550 crore and offer-for-sale (OFS) of up to 2,06,85,800 equity shares.
According to the data from BSE, the investors made bids for 2,77,88,508 equity shares, or 1.23 times, compared to the 2,25,67,270 equity shares offered for the subscription by 1.30 pm on Monday, November 18. The three-day bidding for the issue, which opened on Wednesday, November 13, will conclude today.
The allocation for retail investors was subscribed 1.43 times, while the portion reserved for qualified institutional bidders (QIBs) saw a subscription of 1.71 times. The allocation for employees was booked 8.78 times. However, the quota set aside for non-institutional investors (NIIs) saw bids only 14 per cent for their allocations as of the same time.
Founded in April 2015, Zinka Logistics Solution is a digital platform for truck operators. Its The BlackBuck App is a platform offering payments, telematics, a load marketplace, and vehicle financing services to empower truck operators to achieve their goals efficiently.
The grey market premium (GMP) for Zinka Logistics has been falling consistently amid the volatile market sentiments. Last heard, the company was commanding no premium in the unofficial market, suggesting a flat listing for the investors. However, the GMP stood at Rs 24 before the bidding kicked off.
Brokerages mostly have a positive view on the issue and suggest subscribing for a long term citing its leadership in the market, efficient network and rising demand of the digital services. However, negative cash flows, loss making nature of business and rich valuations may dent the sentiments for the company.
Considering the FY24 Sales of Rs 2,969 crore, Zinka Logistics is going to list at a Mcap-to-sales of 16.2 times with a market cap of Rs 4,818 crore, whereas its peer namely CE Infosystems is trading at Mcap-to-sales of 28.6 times, said Marwadi Financial Services.
We assign 'subscribe' rating to this IPO as the company has India’s largest digital platform for truck operators and omnichannel distribution network driving sales. Also, it is available at reasonable valuation as compared to its peer, it said.
For the financial year ended on March 31, 2024, Blackbuck reported a net loss of Rs 193.95 crore with a revenue of Rs 316.51 crore. The company reported a net loss of Rs 290.5 crore with a revenue of Rs 195.09 crore for the financial year ended on March 31, 2023.
The company has reserved 26,000 equity shares for the eligible employee qualified institutional bidders for the company, who may get a discount of Rs 25 per share. It has reserved 75 per cent of the net for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the offer. Retail investors have 10 per cent reservation in the net offer.
Zinka Logistics Solutions is India’s largest digital platform for truck operators with 963,345 truck operators in the country transacting on its platform in FY24, which comprises 27.52% of India’s truck operators, said Arihant Capital Markets. On the valuation front, we believe that the company is fairly priced, with a 'subscribe for long-term' rating.
Axis Capital, JM Financial, Morgan Stanley India and IIFL Securities are the book running lead managers of the BlackBuck IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Thursday, November 21.